Notes to the Financial Statements - Swissco Holdings Limited

Operations
Review
Overview
The Group focused on two core business segments, namely
marine logistics services and ship repair and maintenance
services. Performance of marine logistics services segment
is dependent mainly on demand for offshore vessel whereas
the ship repair and maintenance segment is supported by
two slipways, waterfront and a 3,000 DWT docking yard.
Our marine logistics business contributed significantly to
the Group’s revenue in FY2009, accounting for 92.0% of
total turnover (FY2008: 89.2%) as the Group continued its
effort to enhance fleet composition under its fleet renewal
and expansion program.
Under the Group’s renewal and expansion program, it took
delivery of 11 new offshore vessels and disposed 5 offshore
vessels and 2 Out-Port-Limit (“OPL”) boats during the year.
One crew boat was transferred to its associated company
in Indonesia. It is the Group’s plan to maintain a young and
versatile fleet to support a wider range of services to the oil
and gas industry.
The Group expects to take delivery of 7 vessels over the
next six months. These new deliveries will enhance the fleet
mix and provide the Group with a competitive edge.
Our ship repair and maintenance services contributed 8.0%
to the Group’s revenue in FY2009 (FY2008: 10.8%). With two
slipways and a 3,000 DWT docking yard, the Group provide
repair and maintenance services to vessels (both owned and
third party vessels) to ensure their seaworthiness and that
they meet standards required by customers, classification
societies and the Flag States. The Group will continue with
its plan to improve operational efficiency of this segment
through training dedicated staff to reduce dependency on
third party contractors.
Review of Performance
The Group’s total revenue rose by 10.6% to S$58.6million
compared to S$52.9million in FY2008. Gross profit, at
S$27.7million was comparable to FY2008 but margin fell
as a result of higher cost of sales related to owning and
operating more vessels. Net profit before tax increased
by 6.7% to S$25.4million (FY2008: S$23.8million). The
net profit included a capital gain of S$10.2million that
comprises S$6.7million from partial divestment of the
Group’s long-time held investment and S$3.5million from
disposal of vessels in line with our fleet expansion and
renewal program, respectively.
Administrative expenses increased by 25.5% to S$11.8million
in FY2009 from S$9.4million in FY2008, mainly due to
impairment loss on trade and other receivables. Finance
cost increased by 9.6% to S$663,000 in FY2009 (FY2008 :
S$605,000) due to increased borrowings which the Group
Swissco International Limited Annual Report 2009
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